$150M California Labor Law Class Action Filed Against Oracle

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Santa Clara, CA: Oracle America Inc. is facing a $150 million California labor law class action filed in California federal court over allegations that it knowingly shorted its sales force on commissions of past sales.

File by former Oracle sales representative Marcella Johnson, the suit asserts that Oracle alerted her she would have a negative commission balance of about $20,000 after it “re-planned” how much she would be paid for sales she made in 2013. According to Johnson, she had already received payment of commissions in November and December 2013 under a previously stated “comp plan.” However, Oracle had subsequently applied the new rate for calculating commissions retroactively, to June 2013, the suit states.

“Oracle’s Compensation Department informed plaintiff that pursuant to the T&C [Terms and Conditions of Incentive Compensation], if she stopped working for Oracle, Oracle would have the right to collect the negative balance from her, including through a lawsuit,” the complaint states.

The suit goes on to state that “Plaintiff could not afford to repay Oracle…As a result, plaintiff felt she had no choice but to continue working for Oracle for months without being paid any commissions. The new commissions she earned were levied by Oracle to offset the ‘negative commission balance’ resulting from retroactive imposition of the inferior commission rate.”

Johnson alleges that employees are coerced by Oracle into accepting re-plans by giving the employees just 24 hours to accept the new commission terms and threatening to withhold paid pending commissions.

“Even if a bold employee refuses to agree to an inferior replan, Oracle barrels ahead anyway, applying the re-plan terms to both past and future sales,” the suit states.

Allegedly, through this practice, Oracle has been able to withhold millions of dollars in due commission wages. The commissions are reduced to align the employee pay with the company’s “financial forecasts and bottom line goals.”

The suit alleges causes of action for failure to pay commission wages in breach of California labor code and contract, failure to pay wages upon separation, and unfair competition. Marcella Johnson is seeking certification of the claims as a class action, restitution, statutory penalties, an award of damages in excess of $150 million and related legal fees and costs.

Johnson and the proposed class are represented by David Sanford, Xinying Valerian and Felicia Medina of Sanford Heisler LLP and Eric C. Kastner and Daniel H. Qualls of Katner Kim LLP.

The case is Marcella Johnson v. Oracle America Inc., number 3:17-cv-00725, in the U.S. District Court, Northern District of California.

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